Pay equity is a hot topic – and not just in employment and HR circles.  Both inside and outside of the courts, the issue has gained national attention and is spurring legislators in states across the country to act. Recent developments are a timely reminder to all employers to start thinking proactively about pay equity and ensure pay is based on proper criteria (performance, experience, effort, skills) and never gender or other protected characteristics.

For instance, in March, a California Court made headlines after allowing a class action complaint alleging systemic pay discrimination on behalf of women in thirty enumerated job positions employed by a high-profile technology company to proceed, in part based on allegations that the company had a business-wide policy of considering new hires’ previous salaries when determining starting salary and job level.  Additionally, in a case that’s grabbing attention from lawyers and non-lawyers alike, Rizo v. Yovino, the Ninth Circuit Court of Appeals reversed course from an earlier decision and held that the employer could not use a female employee’s prior salary alone as the basis for her current salary.

Outside the courts, this year saw even greater attention paid to Equal Pay Day, celebrated in 2018 on April 10 – a date which symbolized how far into the year women must work to earn what men earned in the previous calendar year.

On the heels of these court cases and increased attention, several states have taken it one step further by proposing, and enacting, new or enhanced legislation centered around pay equity.  California was among the earliest to adopt a state pay equity law, but the trend has continued to gain momentum with other states, such as Massachusetts, Delaware, Oregon, and, recently, Washington and New Jersey, following suit.

For example, last month New Jersey enacted what some consider to be one of the strongest pay equity measures in the country.  The law, which will go into effect on July 1, 2018, bans unequal pay for “substantially similar work” and allows victims of discrimination to sue for up to six years of back pay.  Successful employee claimants will have the opportunity to seek monetary damages of triple the amount lost.  New Jersey’s law is considered comparatively strong because it prohibits pay disparities based upon any characteristic protected by the New Jersey Law Against Discrimination—so it is not limited to gender alone.

Likewise, in March, Washington state enacted an updated Equal Pay Opportunity Act.  The law, effective June 7, 2018, prohibits discrimination in compensation based on gender (although pay differentials based on a job-related factor or factors that are consistent with business necessity are not prohibited).  Employers also may not limit or deprive career advancement opportunities based on gender and may not require nondisclosure of wages (or “wage secrecy”) as a condition of employment.

These are just two examples of new laws targeting unequal pay; other states may enact similar laws (or even laws providing broader protections) moving forward—and you can be sure your employees will be paying attention.  Prudent employers will review their pay structures now and regularly to avoid potential problems later.  If you would like assistance reviewing your pay structure, please reach out to your favorite Troutman Sanders employment attorney and we’d be more than happy to assist.

 

When President Trump fired then-Secretary of State Rex Tillerson earlier this month, he did it in one of the most public ways possible: on Twitter.  The kicker? He had not told Tillerson, who was traveling in Africa at the time, about the decision in person before tweeting it.  (Although White House officials have stated that Tillerson was given the news in advance on a phone call with White House Chief of Staff John Kelly, Tillerson was not told face-to-face before the rest of the world found out). Tillerson’s “termination by tweet” offers a timely reminder to all employers about the right (and wrong) ways to handle the firing of employees.

Separating an employee can be a stressful process for everyone involved.  Prudent employers will keep in mind the following tips to handle the situation in an appropriate way:

Handle an employee termination in person.

Firing an employee by email or letter (or tweet!) might seem like the easy way out. But, even if the employment relationship ultimately is not working out, you owe it to your former employee to discuss the decision in person.

On that note: make sure this in-person meeting occurs in the office, in a private setting.  There is more possibility of confusion when someone is fired in a more informal setting, such as at a company event or offsite meeting.  Additionally, there is more possibility of embarrassment or even public displays of emotion by the employee when someone is fired in front of other people.

While there are some very rare circumstances that may require separating an employee in a way other than through a face-to-face meeting, those should truly be exceptional, and discussed with key HR leaders and legal counsel before they occur to make sure there is not a better way to handle things.

When possible, make sure you’ve given clear signs prior to termination that the employee’s performance is not meeting expectations.

It is important to have a truthful, business-related, and non-discriminatory reason to fire an employee.  When possible, back this up with a clear record of the employee’s behavior, whether it’s poor performance, a bad attitude, or something else, over time, and maintain those records. Make sure you share your thoughts with the employee in formal and informal reviews and evaluations before you fire them.  This gives them the opportunity to improve, and, if they do not, will help minimize the chances for surprise, anger and confusion as the employee will not be able to (legitimately) say they didn’t see (or at least couldn’t have seen) the termination coming.

Also, when firing the employee, make sure that your truthful, business-related reason for the termination is clearly communicated to him or her at the time of the termination.  This will become critical in the event the parties wind up in court.

Keep emotions in check.

Make sure that you never fire someone in the middle of a disagreement or other emotionally charged situation—you do not want a decision about someone’s employment to come out of the heat of the moment.  Take a moment (or longer) to cool down first and make a sound decision.

On the other hand, do not let your personal sympathies for the employee keep you from being clear (and standing your ground) once you have made the decision to fire them. Although you might feel better “letting them down easy,” such behavior will only lead them on, ultimately making the termination more painful and drawn out for everyone involved. Let them respond and ask questions, if they wish, and respond honestly and with courtesy, but avoid getting caught in an argument regarding the decision.

In sum, take a “what not to do” lesson from the President and make sure you keep the above tips in mind the next time you find yourself handling an employee termination.  If you need assistance in managing the process or have questions, reach out to your favorite lawyer – before you fire that problem employee.

Believe it or not, there’s a growing trend among some employers to offer a new benefit: “pawternity leave,” or leave for new pet owners.  Offerings range from a few days of leave up to a week or more, and might come in addition to other pet-related benefits, such as pet insurance, pet adoption consulting, bereavement leave—and even bring-your-pet-to-work policies.  So, should you join the trend?

Admittedly, while “pawternity leave” is certainly unique, this type of benefit might not work for many businesses.  However, its growing popularity offers a good reminder for all employers:  you should be thinking about the types of benefits your workforce might want—even if those benefits are a little untraditional. In doing so, the following tips can help.

First, know your workforce.  What are their values, what matters most to them, what do they enjoy?  Employers offering pet-related benefits know that the type of employees they hope to attract and retain value the presence of a furry companion in their lives—so much so that they consider their pet part of the family.  This might not be true for your workforce.  But if that’s the case, then what does top your employees’ list? If you don’t know, it’s worth finding out. Consider going straight to the source: conduct surveys to ask your workforce what benefits they’d like to see most. Not all suggestions may be viable, but they’ll provide valuable insight on your employees’ priorities either way.  Or, perform market research regarding similar companies to try and find out what matters most to employees in your industry.

Second, think outside the box.  Once you’ve got a handle on what your workforce wants, how can you best offer it to them?  Think creatively, and don’t be afraid to see what your competitors are offering.  “Pawternity leave” has been a popular benefit offering among employers who tend to attract a younger workforce and are in urban areas, likely because such employees tend to own pets in higher percentages.  But other employers might find that their workforce prefers different benefits.  Perhaps purchasing season tickets to a popular area sports team for employee rewards and use, stocking healthy prepackaged meals at the office, or providing college counseling assistance for employees with high-school aged children, might be better fits.

Third, recognize that a benefits offering doesn’t have to cost a lot of money to make a big impact.  Even a small change can really make a difference if it’s targeted at your workforce’s biggest priorities.  Regardless, employee satisfaction will often pay for itself in spades.  Plus, it’s certainly more cost-effective (and more beneficial) than paying for benefits that your workforce won’t use, or doesn’t appreciate.  Study after study has shown that happiness is key to productivity.  Happy employees are productive employees (who are also less likely to jump ship for a competitor).  Your employees are one of your most valuable resources, so consider what you can offer to ensure that they remain that way.  And heck, who wouldn’t want time off to play with a new puppy?